Italian police have placed the mayor of Venice under house arrest in a corruption investigation over the construction of a flood barrier to preserve the island city.
Mayor Giorgio Orsoni, arrested on Wednesday along with 34 others including politicians, business people and a retired police general, was accused of embezzling $27m in public funds.
The money was allegedly sent into foreign bank accounts and used to finance political parties, Italian media reported.
Orsoni's lawyers said in a statement that the allegations "appear hardly credible" and said the accusations were coming from people who were already under investigation.
Venice prosecutors have also requested the arrest of the former governor of the Venice region Giancarlo Galan, who is a member of parliament and a former culture minister. A parliament vote is required to lift Galan's immunity.
Galan is from former prime minister Silvio Berlusconi's centre-right opposition Forza Italia party while Orsoni is from the ruling centre-left Democratic Party. Galan launched the project in 2003 with Berlusconi.
The "Mose" (Moses) project started in 2003 and has cost more than $7bn. It was scheduled for completion this year but has been repeatedly hit by delays.
The operation involves about 50 subcontractors working on more than 20km of the Venice lagoon to build 78 mobile barriers against high tides and flooding.
Venice is badly in need of protection due to yearly flooding known as "acqua alta" (high water) - due to a combination of tides, currents and strong winds.
The city sank 23 cm during the whole of the 20th century and is increasingly vulnerable as sea levels rise.